June 25, 2018If you care about female leadership in business, recent research from a review set up by the UK government may leave you stunned. Researchers probing the relative dearth of women in high echelons of the UK’s largest companies shared some of the reasons FTSE 350 board chairs and CEOs offered for not putting more women on their boards. “Most women don’t want the hassle or pressure of sitting on a board,” was one rationale. Or how about, “We have one woman already on the board”?

The attitudes revealed by the comments may shock you and, unfortunately, they remain widespread in global C-suites. While women currently hold 25% of board positions at FTSE 350 companies, that number is much lower in the United States. It’s easy to become pessimistic, but I would rather focus on what we can learn from the best boards. A recent analysis my McKinsey colleague and I conducted of the 50 S&P 500 companies with the highest percentage of women on their boards shows at least 33% of their board seats occupied by women, a 24-percentage-point jump since 2005.

These companies’ experiences are salutary for boards lagging on diversity—including those British leaders who offered up their outdated views. So I’d like to take some of their most common rationales for not putting women on boards and rebut them with the words and recommendations of leaders who know to get board diversity right.

Even laggards acknowledge that increasing the percentage of women in the workforce and on boards is the right thing to do, but a general conviction isn’t sufficient. What’s too often missing is a sense of urgency, says Fabrizio Freda, president and CEO of the Estée Lauder Companies. “People believe we are going to get there eventually,” he says, “but that is not enough. It’s too slow.”

Freda and other executives insist that meaningful change will come only when executives make fewer excuses and instead adopt a set of goals and motivations. For some, that means establishing a target number of board positions occupied by women, while others ensure that the list of candidates is diverse from the beginning, without adherence to a quota. As Mary Dillon, CEO of Ulta Beauty, explains, “We continue to make an active effort to make sure that the slate is diverse. Just the act of being cognizant, and having it top of mind, will drive action.”

Some companies cite the small pool of female executives with particular experiences as a continuing challenge in fostering board diversity, especially in areas such as digital technology. Overcoming this hurdle requires openness to creative solutions. One is to move beyond focusing a search on executives with prior board experience. Dan McCarthy, president and CEO of Frontier Communications, notes that many of the women on his board were first-time directors. “We were willing to take risks on individuals,” he says. “We look for someone who has the ability to move from the tactical to the strategic, and it has turned out to be great.”

This approach can be particularly helpful for small- and mid-cap companies that struggle to compete with large corporations for high-profile candidates. Genpact President and CEO Tiger Tyagarajan observes that “some people may prefer to join the board of a mid-cap company where they can actually be more engaged and have an impact on the company’s strategy, versus a large company, where more time may be spent on general governance issues.” Leaders also tell us that looking beyond current or former CEOs and C-suite executives to other spheres such as law, academia, and the social sector can be rewarding, creating a rich balance of perspectives at the table. Ultimately, it’s about defining what is non-negotiable, such as digital or finance expertise, and then seeing where you can be flexible.

Cultivating a pipeline of female candidates is arguably the single most important element of a successful board-inclusion effort. When conducting a search, this means relying on both personal networks and search firms to identify candidates. Relying only on the former, particularly when a board is composed primarily of men, risks perpetuating the same slates of male candidates . Relying solely on search firms can produce highly qualified candidates who may not be well-suited to the personal dynamics of the board.

A little patience may also be necessary. As John Thompson, Chairman of Microsoft, points out, it may take two or three years to attract some of the best candidates. By taking the time to get to know them, even when they may not be available for some time, companies will establish foundations for potential future positions. Businesses that are open about their quest for diversity, meanwhile, will benefit in the long run. Michael I. Roth, chairman and CEO of IPG, told us his reputation as a male champion of diversity had prompted a search firm to send him a strong female board candidate proactively, even though he hadn’t initiated a search engagement with it.

The diversity leaders I spoke with have long since crossed the bridge of understanding the benefits of gender diversity. But their experiences provide a useful checklist for those still trying to convince the skeptics:

Board diversity helps draw and motivate talented employees. “To attract the best talent into the company, you need to appeal to 100% of the top talent, not 50%,” says Genpact’s Tyagarajan. “To do that, you need strong female role models.”

Boards that represent the customer base have better intuition. For retailers especially, the reality is that women make up more than half of global purchasers. Board diversity is simply better business.

A diverse board boosts the quality of decisions. You get questions from perspectives that you hadn’t thought of before, says Rodney McMullen, Chairman and CEO of Kroger, “and this helps you avoid more blind spots.”

Perhaps the best way to overcome antiquated attitudes about female board members is to appoint more people to the board with enlightened ones. That includes preparing female executives in your company for future board participation, by placing them in roles with profit-and-loss responsibility, ensuring they have committed mentors and sponsors, and equipping them with the knowledge and skills needed to confront the governance and strategy issues that boards typically face. This can create a virtuous cycle that speeds progress on board diversity, and counteracts cynicism with success stories.

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